Virginia Gov. McDonnell walks tightrope in first year on job

RICHMOND - Virginia Gov. Robert F. McDonnell has spent his first year in office on a political tightrope of sorts, trying to satisfy his conservative base while appealing to the moderate swing voters who helped elect him in a landslide victory.

For conservatives, he points to cutting $4 billion from the state budget in his first legislative session last year, paring back spending to 2006 levels and not raising taxes. And he directs moderates to the billions of dollars he secured in transportation and education funding during his second legislative session, which ended Sunday.

"The electorate is more than ever demanding results," McDonnell said in an interview. "You're only as good as your last session, your last major issue."

With the legislative session behind him and General Assembly contests looming in November, McDonnell can boast about a pair of major accomplishments - $2.9 billion in bonds for perennially clogged roads and $100 million for under-funded colleges. But the state's first Republican governor in eight years also suffered two significant defeats - a proposal to privatize the state's liquor stores and reforming the state's pension system did not get far.

Democrats accuse McDonnell - who says 92 percent of his legislation was passed - of taking on too much debt and wasting time on a plan to privatize the Department of Alcoholic Beverage Control that many members of his party opposed.

"He took a big hit by virtue of the fact that neither chamber wanted to take up his ABC plan," said Sen. A. Donald McEachin (D-Richmond). "He will probably claim some progress on transportation. But I think history will record that the amount of debt we're taking on will force us at some point to raise revenue."

Unlike in last year's session, which yielded modest successes that included a $50 million economic development package to lure businesses to the state, the governor undertook a more aggressive approach to the General Assembly's 47-day session this year.

Lawmakers said McDonnell resumed breakfasts with legislative leaders that had stopped under former governor Timothy M. Kaine (D). The 14-year House veteran also began regular policy meetings with regional caucuses of both parties, such as Northern Virginia Democrats. He met with nearly every legislator - 33 of 40 senators and 78 of 100 delegates. He even texted them on their birthdays.

"I think we have a good working relationship on those topics that avoid the hot-button social conservative issues. Certainly, we don't have much common ground there," Sen. R. Edward Houck (D-Spotsylvania) said.

McDonnell received strong Democratic support for his two signature achievements. His biggest legislative drubbing came at the hands of his own party, some of whose members have have criticized him for not informing them about plans before they are announced and having too many priorities.

"Some feel like he is doing too much, but he feels like he has just four years to get things done," Del. S. Chris Jones (R-Suffolk) said.

McDonnell submitted 53 bills based on his priorities and 130 on behalf of state agencies - many more than his Democratic predecessors, Kaine and Mark Warner. He primarily tried to secure money for transportation, revamp college and university funding, lay out $54 million to lure businesses to Virginia and reform state government, which included privatizing liquor stores and changing the pension system.

His transportation proposal represents the largest infusion of funds into the state's cash-strapped highway coffers in more than two decades - and will help fund 900 projects. But legislators approved only $33 million of the additional $150 million he sought in transportation money from the general fund.

Some Democrats and conservative Republicans had been concerned about the state's rising debt, but McDonnell and his team worked for weeks to alleviate fears and convince lawmakers that spending would not hurt the state's financial standing or its coveted AAA bond rating. Some skeptics remain.

"We not only pulled out the credit card, we maxed it out on that," House Minority Leader Ward L. Armstrong (D-Henry) said.

McDonnell's higher education proposal, which received overwhelming approval, is designed to provide a stable funding source for schools so they can avoid major tuition increases. Colleges will be provided with financial incentives to fulfill goals, such as graduating students in four years and awarding more degrees in high-demand technology fields.

The bulk of the $100 million will be spent toward McDonnell's goal of awarding 100,000 new associate and bachelor's degrees over the next 15 years through financial aid, grants to virtual schools and other programs.

But McDonnell's plan to privatize the state's 77-year-old monopoly on liquor died without a hearing. Members of both parties feared that the plan, which included tripling the number of retail outlets that sell booze, would lead to an increase in alcohol consumption, a loss of state revenue and higher liquor prices.

"I'm not not sure I fully understand the fixation on privatizing ABC," Sen. Mark R. Herring (D-Loudoun) said. "That one still has me still scratching my head."

McDonnell had hoped lawmakers would require state employees to start making a 5 percent annual contribution toward their retirement. He proposed giving employees a 3 percent pay increase to offset the change but thought the state could reap savings by allowing employees to absorb what was effectively a 2 percent cut in take-home pay.

Instead, the legislature agreed to require employees to make the new payments but decided to fully offset the change by giving them a 5 percent pay raise. The result was a cost increase of $15 million.

"He came in with four pretty broad initiatives," House Speaker William J. Howell (R-Stafford) said. "I think at the end of the day he's got a lot to tout. He got a lot of good support on both sides of the aisle."